B&N: earnings rise but Nook sales fall again

B&N: earnings rise but Nook sales fall again

Barnes & Noble has turned a profit in its second quarter of trading, but sales in its Nook business have dropped by 32%.

The US bookseller reported second quarter earnings for the three months to 26th October were up 13.7% to $76m (before EBITDA), in comparison to the same period a year ago. The profits were achieved despite falling sales, as second quarter consolidated revenues decreased 8.0%, to $1.7bn, compared to a year earlier.

The company said sales in its Nook media arm, which includes content and accessories as well as hardware, fell by 32.3% to $109m during the second quarter. Device and accessory sales suffered more than content revenue, down 41.3% to $51m. Digital content sales alone fell by 21.2% to $57m. Despite Nook sales being badly hit, losses in the unit decreased $6m to $45m, due to reduced expenses and lower device mark downs.

Michael Huseby, president of Barnes & Noble and chief executive officer of Nook Media, said:  “The company is focused on executing its plans for the holiday season and our booksellers are prepared to welcome holiday shoppers and recommend thoughtful gift ideas for everyone on their list.”  

Sales at Barnes & Noble book stores and website saw revenues decreased by 7.5% to $921m for the quarter, in-line with company expectations. B&N attributed the decrease to store closures and lower online sales. “Core” comparable bookstore sales, which exclude sales of Nook products, decreased 3.7% for the quarter.

B&N’s College business also saw a 4.6% decline in sales to $738m. The company said: “Comparable College sales decreased 3.6% for the quarter, impacted by a higher mix of lower priced used textbook rentals and lower textbook sales, partially offset by higher general merchandise sales.”

After the financial report was released, B&N’s shares dropped more than 3% in premarket trading in the US.